Patriarch Equities, Sioni Group, and Highgate announced that they have purchased the 618-room Affinia Manhattan NYC hotel through a joint venture.
Highgate has also assumed management of the property as part of the transaction. Pebblebrook Hotel Trust announced that the sale of the hotel closed at $217.5 million.
The sale price of $217.5 million reflects a 4.1 percent net operating income capitalization rate based on the hotel’s 2016 projected operating performance.
“We are very pleased with the sale of the Manhattan NYC,” noted Jon E. Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “This sale represents our second significant step towards successfully reducing our exposure to the New York market. The Manhattan NYC marks the fourth hotel sold under our strategic disposition plan that we initiated earlier this year, which has generated almost $500 million in gross proceeds. These dispositions have allowed us to take advantage of the imbalance between the higher private market values for our hotels and the lower value of our company as determined by the public market.”
Proceeds from the sale of the Manhattan NYC will be utilized to repay the $140.0 million loan secured by the property and for general business purposes which may include further reducing the Company’s outstanding debt or repurchasing the Company’s common shares. The sale of Manhattan NYC closed on December 20, 2016.
Effective immediately, this upscale, full-service hotel has been re-branded the Stewart Hotel. The property is located at 371 Seventh Avenue, across from Madison Square Garden and Pennsylvania Station, just steps from Times Square and Fifth Avenue. The 28-story, 474,000-square-foot hotel features modern guest rooms and suites by acclaimed design firm Rockwell Group, as well as over 10,000 square feet of event space.
“Highgate is thrilled to complete the acquisition of Affinia Manhattan NYC, now the Stewart Hotel, along with our new partners at Patriarch Equities and Sioni Group,” said Neil Luthra, principal at Highgate. The Stewart is an exciting addition to Highgate’s collection of independent hotels, particularly given its desirable location at the crossroads of an area that should see meaningful investment and redevelopment activity in the coming years.”